[Into the Stocks] Sungil Hi-Tech Soars on Electric Vehicle Boost Following 'Inflation Reduction Act' Passage

Sungil Hi-Tech Stock Price Up 47.5% Since Listing
Expansion of Used Battery Recycling Industry Alongside Electric Vehicle Growth
Only Domestic Company Commercializing Used Battery Powdering Process
Strong Performance Growth Expected from 2025

[Asia Economy Reporter Hwang Yoon-joo] The stock price of Sungil Hightech, which succeeded in its initial public offering (IPO) during a bear market, is soaring. Despite the release of the one-month lock-up shares, the stock price rose due to expectations of benefits from the U.S. 'Inflation Reduction Act.'

As of 9:31 a.m. on the 1st, Sungil Hightech's stock price was 130,100 KRW, up 47.5% compared to the closing price on the listing day (July 28) of 88,200 KRW.

This is a remarkable performance in the recently sluggish market. The reason investment sentiment is flocking to Sungil Hightech is due to its position as the 'absolute leader in the used battery recycling business.' Sungil Hightech is the only company in Korea capable of recycling from the battery cell stage. Used battery recycling goes through the stages of 'discharge → disassembly → crushing.' After this process, it must be pulverized, but no domestic competitors have yet commercialized the pulverization process.

The industry views 2025 as a growth turning point for Sungil Hightech. This is because the volume of electric vehicle used batteries is expected to surge from 2025. From this time, Sungil Hightech, which has commercialized the pulverization process, will have an advantageous position over latecomers.

Yoon Hyuk-jin, a researcher at SK Securities, said, "The used battery recycling market size is expected to grow at an average annual rate of 53%, from 46,000 tons in 2021 to 254,000 tons in 2025," adding, "Sungil Hightech's sales will rapidly grow from 194.5 billion KRW in 2022 to 498.8 billion KRW in 2025."

The securities industry also has high expectations for earnings forecasts. According to FnGuide, the estimated sales are 212.8 billion KRW in 2022, 242 billion KRW in 2023, and 377.4 billion KRW in 2024. The operating profit estimate for this year is 33.9 billion KRW, expected to increase by 101.09% compared to the same period last year.

[Image source=Yonhap News]

Along with the rapid growth of the used battery industry, the passage of the U.S. 'Inflation Reduction Act' on the 16th (local time) is also driving the stock price. The bill involves large-scale investments to respond to climate change and includes provisions for expanding electric vehicle adoption. The used battery recycling business is inseparable from electric vehicles.

Since listing, the stock price had been moving below 100,000 KRW, but gained momentum after August 24. On August 29, despite concerns about potential selling pressure (overhang) due to the release of the one-month mandatory lock-up shares, individual and foreign investors bought 9.3 billion KRW and 18.9 billion KRW worth of shares, respectively.

Sungil Hightech is currently preparing overseas subsidiaries in the U.S., Germany, and Spain. The company plans to continuously expand its bases and production volume in North America and Europe.

This content was produced with the assistance of AI translation services.